What’s new: Fuel prices in China were increased by 750 yuan ($118) per ton for gasoline and 720 yuan per ton for diesel on Friday, the National Development and Reform Commission announced (link in Chinese) Thursday. It’s the sixth consecutive hike this year.
After the change, the upper price limit for standard 95 RON gasoline surpassed the 9-yuan threshold in 27 out of the Chinese mainland’s 31 provincial-level regions, based on public information. Data for the remaining four regions — the provinces of Heilongjiang, Liaoning, Jilin, and the Inner Mongolia autonomous region — are not yet available.
In Beijing, the upper price limit for 92 RON gasoline jumped to 8.09 yuan per liter, and the price of 95 RON was hiked to 9.21 yuan per liter.
Background: This is the largest price hike since 2013, when China introduced a mechanism that sets domestic gasoline prices every 10 working days.
Refined oil prices in China rose sharply after international crude prices went through the roof amid the war between Russia and Ukraine. Brent crude, the international oil price benchmark, hit its highest level since July 2008 last week.
Under China’s 10-day oil product pricing mechanism, regulators set domestic gasoline prices in line with changes in international crude prices. But if the international price goes above $130 per barrel, the government freezes the domestic price, forcing upstream producers to swallow the added costs. Prices are also frozen if they dip below $40 per barrel.
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Cover Story: Why the Wild Ride for Oil and Gas Prices Isn’t Over
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)
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